Bank of England aims to boost fintech sector

The Bank of England plans to encourage innovation in financial technology by collaborating with companies who are designing innovative payment systems and cyber security, to further build on Bitcoin’s blockchain concept.

Threadneedle Street issued his remarks on Friday, in which he set out the importance of fintech and the implications that innovation in finance could have on managing the economy and financial stability.

Carney said: “Fintech should neither be the wild west nor strangled at birth. The Bank is devoting considerable resources to ensure whatever develops is sustainable, not ephemeral.”

He said it would “change the nature of money, shake the foundations of central banking and deliver nothing less than a democratic revolution for all who use financial services”.

“The ‘accelerator’ will work with new technology firms to help us harness fintech innovations for central banking. In return, it will offer firms the chance to demonstrate their solutions for real issues facing us as policymakers, together with the valuable ‘first client’ reference that comes with it,” said Carney.

He said that the behind-the-scenes payment system - known as real-time gross settlement (RTGS) - would be opened up beyond the 48 major institutions that use it to so-called payments service providers, which deal with retailers. In this way the service providers will not have to rely on the banks with which they are competing to gain access to the payments network.

“It should also enable more efficient, effective and inclusive payments, including in ways that we cannot fully anticipate,” Carney said. Firms that sign up to use RTGS will also be subjected to regulation, he added.